10-Q: Wells Fargo Reports Q3 2026 Earnings Growth

Wells Fargo & Company announced its third quarter 2026 financial results, reporting an increase in net income and diluted EPS compared to the same period last year, while maintaining strong capital and liquidity.

Summary

• Wells Fargo & Company reported net income of $5.95 billion ($1.87 diluted EPS) for Q3 2026, an increase from $5.59 billion ($1.66 diluted EPS) in Q3 2025.
• For the first nine months of 2026, net income was $17.6 billion ($5.47 diluted EPS), up from $16.0 billion ($4.64 diluted EPS) in the same period of 2025.
• Total revenue for Q3 2026 was $21.87 billion, a 2% increase from $21.44 billion in Q3 2025, driven by higher net interest income.
• Noninterest expense decreased by 1% to $13.74 billion in Q3 2026 compared to $13.85 billion in Q3 2025.
• The company maintained strong capital and liquidity positions, with a Common Equity Tier 1 (CET1) ratio of 10.03% (Standardized Approach), exceeding regulatory minimums.
• Allowance for credit losses for loans was $14.5 billion at September 30, 2026, a slight increase from December 31, 2025.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a generally positive report, with solid year-over-year growth in net income and EPS, alongside strong capital and liquidity positions.

Positives

• Net income increased by 6% to $5.95 billion in Q3 2026 compared to $5.59 billion in Q3 2025.
• Diluted EPS rose to $1.87 in Q3 2026 from $1.66 in Q3 2025.
• Total revenue increased by 2% to $21.87 billion in Q3 2026 compared to $21.44 billion in Q3 2025.
• Net interest income increased by 5% to $12.52 billion in Q3 2026 compared to $11.95 billion in Q3 2025.
• Noninterest expense decreased by 1% to $13.74 billion in Q3 2026 compared to $13.85 billion in Q3 2025.
• Common Equity Tier 1 (CET1) ratio of 10.03% (Standardized Approach) exceeds regulatory minimums and buffers.
• Liquidity Coverage Ratio (LCR) was 122%, exceeding the regulatory minimum of 100%.
• Investment advisory and other asset-based fees increased by 15% to $3.05 billion in Q3 2026.

Negatives

• Noninterest income decreased by 1% to $9.35 billion in Q3 2026 compared to $9.49 billion in Q3 2025.
• Net gains from trading activities decreased by 21% to $1.11 billion in Q3 2026 compared to $1.41 billion in Q3 2025.
• Mortgage banking income decreased by 39% to $164 million in Q3 2026 compared to $268 million in Q3 2025.
• Provision for credit losses increased by 51% to $1.03 billion in Q3 2026 compared to $0.68 billion in Q3 2025.
• Commercial portfolio net loan charge-offs increased in the third quarter of 2026.
• Consumer portfolio net loan charge-offs increased in the third quarter of 2026, primarily due to higher losses in the auto portfolio.

Risks

• The Federal Reserve Board issued rules making changes to its supervisory stress testing framework and stress capital buffer (SCB) requirements.
• The company's effective income tax rate increased in the first nine months of 2026 compared to the same period a year ago.
• Noninterest expense increased in the first nine months of 2026 due to higher technology, telecommunications and equipment expense, and advertising and promotion expense.
• The company's net interest margin decreased in both the third quarter and first nine months of 2026 compared to the same periods a year ago.
• The allowance for credit losses for loans increased driven by higher loan balances for commercial and industrial and auto loans, partially offset by improved credit performance in commercial real estate loans.

Future Outlook

The company's future outlook is influenced by economic conditions, regulatory changes, and its ability to manage expenses and credit risk. Forward-looking statements are subject to various risks and uncertainties, including economic downturns, market disruptions, and regulatory developments.

Management Comments

• In third quarter 2026, we generated $6.0 billion of net income and diluted earnings per common share (EPS) of $1.87, compared with $5.6 billion of net income and diluted EPS of $1.66 in the same period a year ago.
• Financial performance for third quarter 2026, compared with third quarter 2025, included the following: total revenue increased due to higher net interest income, partially offset by lower noninterest income; noninterest expense decreased due to lower personnel expense, partially offset by higher technology, telecommunications and equipment expense; average loans increased due to growth in our commercial and industrial and auto portfolios; and average deposits increased driven by growth in interest-bearing deposits.
• In the first nine months of 2026, we generated $17.6 billion of net income and diluted EPS of $5.47, compared with $16.0 billion of net income and diluted EPS of $4.64 in the same period a year ago.
• We maintained a strong capital and liquidity position in the first nine months of 2026, which included the following: our Common Equity Tier 1 (CET1) ratio was 10.03% under the Standardized Approach (our binding framework), which continued to exceed the regulatory minimum and buffers of 8.50%; our total loss absorbing capacity (TLAC) as a percentage of total risk-weighted assets was 22.99%, compared with the regulatory minimum of 21.50%; and our liquidity coverage ratio (LCR) was 122%, which continued to exceed the regulatory minimum of 100%.

Industry Context

StockSavvy.ai notes that Wells Fargo's performance reflects broader trends in the banking sector, including the impact of interest rate environments on net interest income and the ongoing focus on capital adequacy and liquidity management in response to evolving regulatory landscapes.

Comparison to Industry Standards

• Wells Fargo's CET1 ratio of 10.03% (Standardized Approach) is above the regulatory minimum and buffers of 8.50%, indicating a strong capital position relative to regulatory requirements.
• The Liquidity Coverage Ratio (LCR) of 122% exceeds the regulatory minimum of 100%, demonstrating a robust liquidity position.
• The company's net interest margin of 2.43% for Q3 2026 is lower than the 2.61% reported in Q3 2025, reflecting industry-wide pressures on net interest margins due to changes in asset yields and funding costs.
• The increase in provision for credit losses by 51% year-over-year aligns with a cautious approach to credit quality in the current economic environment, a trend observed across many large financial institutions.

Legal Proceedings

• Advisory account cash sweep litigation.
• Anti-money laundering and economic sanctions related investigations.
• Fair access to banking investigations.
• Home mortgage discrimination litigation.
• Interchange litigation.
• Seminole Tribe Trustee litigation.

Stakeholder Impact

• Shareholders: Increased net income and EPS may lead to positive sentiment; share repurchases and dividends are ongoing.
• Creditors: Strong capital ratios and liquidity provide a stable outlook for creditors.
• Employees: Personnel expenses decreased slightly, but efficiency initiatives and revenue-related compensation indicate ongoing focus on workforce management.
• Regulators: The company continues to meet and exceed regulatory capital and liquidity requirements, indicating a positive relationship with regulatory bodies.

Next Steps

• Continue to manage capital and liquidity positions to meet regulatory and market expectations.
• Monitor economic and market conditions, including interest rate changes and credit quality trends.
• Implement efficiency initiatives to manage noninterest expense.
• Focus on growth in commercial and industrial and auto loan portfolios.
• Continue to manage risk associated with credit, market, and liquidity exposures.

Key Dates

Recommendation

Wells Fargo demonstrates solid performance with year-over-year growth in key financial metrics and maintains strong capital and liquidity. However, the slight increase in provision for credit losses, decrease in net interest margin, and ongoing legal proceedings suggest a need for caution. The company is performing as expected within a challenging financial landscape, making a 'hold' recommendation appropriate for seasoned investors seeking stability rather than aggressive growth.

Keywords

Wells Fargo, 10-Q, Financial Results, Net Income, EPS, Revenue, Credit Losses, Capital Ratios