Wells Fargo reported third-quarter results on Tuesday, October 13, before the market open. Net income was $5.95 billion, or $1.87 per share - up 6.5% and 12.7% from the year-ago quarter. Revenue rose 2.0% to $21.87 billion, the bank left its full-year guidance unchanged, and the stock closed down 3.10% on the day of the report.
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What Was Reported
| Third quarter 2026 | Third quarter 2025 | Change | |
|---|---|---|---|
| Total revenue | 21,870 | 21,436 | +2.0% |
| Net interest income | 12,517 | 11,950 | +4.7% |
| Noninterest income | 9,353 | 9,486 | -1.4% |
| Noninterest expense | 13,743 | 13,846 | -0.7% |
| Provision for credit losses | 1,029 | 681 | +51.1% |
| Net income | 5,951 | 5,589 | +6.5% |
| Diluted EPS (dollars) | 1.87 | 1.66 | +12.7% |
| Return on tangible common equity | 16.3% | 15.2% | +1.1 pts |
| Net interest margin | 2.43% | 2.61% | -0.18 pts |
| CET1 ratio | 10.0% | 11.0% | -1.0 pts |
In millions of dollars, except per-share amounts and ratios. Source: the bank's earnings release and financial supplement, October 13, 2026. Results are preliminary pending the 10-Q, and the capital ratio is a preliminary estimate.
What Drove the Quarter
Net interest income rose 4.7% to $12.52 billion, but the net interest margin fell to 2.43% from 2.61% a year ago (last quarter it stood at 2.43%, unchanged). On a non-GAAP line that excludes Markets activity, (NII ex-Markets), net interest income was $12.09 billion, up 2.4% - about half the growth rate of the full line.
In Wealth and Investment Management revenue rose 11.7% to $4.10 billion, and investment advisory and other asset-based fees rose 14.5% to $3.05 billion. Company-wide client assets reached $2.74 trillion, up 11%.
Investment banking fees for the firm as a whole rose 6.4% to $894 million, down 4.8% from the previous quarter. In the CIB segment they rose 10.3% to $611 million. Markets revenue fell 1.0% to $1.84 billion, with two opposite directions inside it: equities trading rose 20.7% to $543 million, while FICC - trading in bonds, currencies and commodities - fell 6.9% to $1.26 billion.
Noninterest income fell 1.4% to $9.35 billion. Venture capital results weakened: net gains from equity securities were $4 million, against $149 million a year ago and $847 million in the second quarter. Mortgage banking income fell to $164 million from $268 million, and the sale of the rail car leasing business in the first quarter reduced lease income.
Expenses fell 0.7% to $13.74 billion, and the efficiency ratio fell to 63% from 65%. Headcount stands at 194,369, down 7.8% in a year. But the year-ago quarter included $296 million of severance expense, so part of the decline comes from the comparison base.
CEO Charlie Scharf said the results reflect broad-based growth, higher earnings and stronger returns. According to him, every segment grew revenue while expenses fell, customers are healthy and delinquencies are low. Rates, oil prices and inflation are risks, but investment in AI, employment and wages outweigh them.
Credit
The provision for credit losses rose 51.1% to $1.03 billion ($914 million in the previous quarter), but net charge-offs rose only 3.0% in a year. This year the provision consists of $983 million of net charge-offs and a $46 million reserve build. A year ago it consisted of $954 million of charge-offs less a $273 million reserve release, which came to $681 million. Of the $348 million gap, $319 million is the swing from release to build, and $29 million is the rise in charge-offs.
Net charge-offs rose 3.0% in a year and 11.3% from the previous quarter ($883 million). The net loan charge-off ratio fell to 0.38% from 0.40% a year ago, but rose from 0.34% last quarter. The allowance for loans stands at $14.46 billion, and its coverage ratio fell to 1.38% from 1.52% a year ago.
Capital, and Capital Returns
The CET1 ratio fell to 10.0%, from 11.0% a year ago and 10.3% in the previous quarter. According to the presentation, higher rates reduced AOCI and took 38 basis points off the ratio versus the second quarter.
The bank bought back $2.5 billion of shares gross (28.6 million shares) and paid $1.5 billion of dividends. The total, about $4.0 billion, is about 70% of net income to common shareholders, $5.70 billion. The quarterly dividend declared: $0.50 per share, from $0.45 in the second quarter - an increase of 11%. Return on tangible common equity was 16.3%, against 15.2% a year ago and 17.7% in the previous quarter.
One-Offs and Guidance
The results include $170 million of discrete tax benefits, from the resolution of prior-period matters. An amount like that is worth about 6 cents per share, which means that without it EPS would have been about $1.81.
Versus the second quarter, revenue fell 3.3%, net income fell 7.1% and EPS fell from $2.00 to $1.87. Noninterest income fell by $952 million; the gap in gains on equity securities alone - $847 million in the second quarter against $4 million this time - is $843 million. In the first nine months EPS is $5.47, against $4.64 a year earlier (up 17.9%), and revenue is $65.94 billion, up 5.7%.
Guidance for the year was unchanged: net interest income of about $50 billion and noninterest expense of about $55.7 billion. For the fourth quarter the bank expects net interest income of about $13 billion, about 3.9% above the $12.52 billion of the third quarter. Against expense of $41.73 billion in the first nine months, the full-year expense guidance implies about $13.97 billion in the fourth quarter.
Versus Expectations, and the Stock
According to CNBC's live coverage, which cited LSEG and StreetAccount, analysts expected earnings of $1.85 per share and revenue of $22.3 billion. Reported EPS beat the consensus by 1.1%, and revenue was 1.9% below it. Net interest income, $12.52 billion, was 1.1% below the $12.66 billion consensus, and the provision for credit losses, $1.03 billion, was below the $1.14 billion consensus. Excluding the tax benefits, EPS was below the consensus.
The stock opened on the day of the report at $80.57, below the previous close of $83.32, and traded during the day between $80.31 and $83.43. It closed at $80.74, down 3.10%. According to CNBC, on the morning of the report, before the reaction, the stock was down about 10% year to date.
הזווית שלי
דעה אישית של אילן אברמוב - לא ייעוץ ולא המלצה
What interests me in this report is the gap between the headline and the detail. EPS beat the consensus by 2 cents, but about 6 cents of it came from one-time tax benefits, and revenue and net interest income fell short of the consensus. At the same time the CET1 ratio fell a full percentage point in a year, while the bank returned about 70% of its earnings to shareholders.
It can be read in two ways. The positive reading: according to Scharf every segment grew, the efficiency ratio improved, return on tangible equity rose to 16.3%, and charge-offs rose only 3.0% in a year - the jump in the provision is explained mostly by a comparison to a year in which a reserve was released. The drop in capital in the quarter, 30 basis points, is also smaller than the accounting hit from rates, 38 basis points. The second reading: the net interest margin eroded by 18 basis points in a year, the decline in expense rests on a base that included severance, and venture capital gains nearly vanished. Both readings rest on the same numbers, and on the day of the report the market seemed to lean toward the second - but one day is not a verdict.
The number I will follow is about $13 billion of net interest income in the fourth quarter: a jump of about 3.9% in a single quarter, when the margin stood still in the last one.
(To be clear: this is my personal opinion only. Nothing here is a recommendation to take any action, and there is no forecast here of the price of any security.)
Ilan Abramov, the author, or anyone on his behalf may hold some of the securities or funds mentioned in this article.
