01—Abstract
Summary
Summary of the 10-Q filed April 29, 2026. Cited figures are marked; the original filing is the authoritative source.
Wells Fargo's first quarter 2026 10-Q shows a solid earnings print with clear pressure points beneath the headline.
Net income was $5.3 billiona ($1.60 diluted EPS), up 7% year over year, on total revenue of $21.4 billion (up 6%). Growth came from higher noninterest income (up 8%, led by investment advisory fees, card fees, and equity gains) and net interest income (up 5%). However, noninterest expense rose 3% to $14.3 billion, the provision for credit losses climbed 22% to $1.1 billion, and the efficiency ratio deteriorated to 67% from 69% a year ago (and from 64% in fourth quarter 2025).
Net interest margin compressed to 2.47% from 2.67% a year earlier, reflecting growth in lower-yielding Markets assets and higher interest-bearing deposits and short-term borrowings. Credit quality shows mixed signals. Net charge-offs rose 10% to $1.1 billionb, driven by commercial and industrial losses, including a single fraud-related loss in CIB.
Nonperforming assets rose to $8.8 billionc (0.86% of loans), and commercial and industrial nonaccruals increased. Offsetting this, consumer credit card losses declined and commercial real estate reserves were released on improved performance. Total loans grew 11% year over year to $1.02 trillion at period-end, led by commercial and industrial lending and auto loans, which adds to forward credit-cost risk.
Capital and liquidity remain well above requirements, though ratios fell sequentially. The Standardized CET1 ratio was 10.29%d (versus 10.61% at year-end 2025 and 11.09% a year ago), against a required minimum of 8.50%, and the TLAC ratio was 22.98%. The LCR was 120%.
Management continued returning capital, repurchasing 46 million shares for $4.0 billion and paying $1.6 billion in dividends, while the common dividend was held at $0.45 per share (up 13% year over year). The Board's remaining buyback authorization stood at about $25.8 billion.
Share count fell 6% year over year, which is a meaningful driver of EPS growth. Also notable: the FRB terminated a 2018 consent order on governance and operational risk, and the company completed the sale of its rail car leasing business.
02—Key points
Key Highlights
- Net income of $5.3B (+7% YoY) and diluted EPS of $1.60 (+15% YoY), helped by a 6% reduction in average diluted shares to 3.12B (lower share count supporting EPS growth more than net income growth)
- Total revenue rose 6% to $21.4B, with noninterest income up 8% (investment advisory fees +11%, card fees +9%, equity securities gains of $172M vs. a $343M loss last year) and net interest income up 5% to $12.1B
- Net interest margin compressed to 2.47% from 2.67% a year ago, reflecting growth in lower-yielding Markets assets and higher interest-bearing deposits and short-term funding
- Noninterest expense up 3% to $14.3B and provision for credit losses up 22% to $1.1B; efficiency ratio worsened to 67% from 69%... (year-over-year comparison improved, but sequentially it deteriorated from 64%)
- Asset quality softened in commercial lending: commercial net charge-offs rose to 0.24% from 0.16%, C&I nonaccrual loans increased, and total NPAs reached $8.8B (0.86% of loans); consumer credit card losses improved
- Capital remains strong but declined sequentially: Standardized CET1 of 10.29% (vs. 10.61% at 12/31/25) against an 8.50% requirement; TLAC at 22.98% vs. a 21.50% minimum; LCR of 120%
- Capital returns continued: $4.0B of buybacks (46M shares at an average of about $87) and $1.6B of dividends; quarterly dividend held at $0.45 per share; roughly $25.8B of buyback authority remaining
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed April 29, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Net Income | $5.25B$4.89B | +7.3% |
| EPS (Basic) | $1.62$1.41 | +14.9% |
| EPS (Diluted) | $1.60$1.39 | +15.1% |
| Shares Outstanding (Basic) | 3.08B3.28B | −6.1% |
| Shares Outstanding (Diluted) | 3.12B3.32B | −6.1% |
05—Questions
Frequently Asked Questions
Why did earnings per share grow faster than net income?
Net income applicable to common stock grew 8% year over year, while diluted EPS grew 15%. The difference reflects a 6% reduction in diluted average shares (from 3,321.6M to 3,117.7M) driven by share repurchases over the past year, along with a lower preferred dividend burden after preferred stock was partially redeemed.
Is the net interest margin decline a concern for investors?
The NIM fell to 2.47% from 2.67% a year earlier, though net interest income still grew 5%. Management attributes the decline mainly to growth in lower-yielding Markets assets and higher interest-bearing deposits and short-term borrowings. Net interest income excluding Markets rose only about 2% (from $11.4B to $11.6B), so investors should monitor whether lower rates and deposit mix shifts continue to pressure core spread income. The company's own sensitivity table shows a $2.3B hit to 12-month NII from a 100 bp drop in rates.
How is credit quality trending, and what should investors watch?
Total net charge-offs rose 10% to $1.1B, and the provision rose 22%, driven by commercial and industrial losses (including a single fraud-related loss in CIB) and higher C&I nonaccruals. Total NPAs rose to $8.8B. Offsets include lower credit card losses and a reduced CRE allowance on improved performance. The ACL for loans was $14.4B (1.41% of loans, down from 1.45%). Investors should watch the rising criticized C&I portfolio ($16.9B, up from $15.9B) and the broader economic outlook, which assumes higher unemployment and lower CRE prices in the base scenario.
Is Wells Fargo's capital position adequate after the sequential decline?
Yes. The Standardized CET1 ratio of 10.29% exceeds the 8.50% requirement by roughly 180 basis points, and total capital of 13.81% is well above the 12.00% minimum. The decline reflected RWA growth (up 2% sequentially to $1.32T), share repurchases exceeding earnings retention, and AOCI losses. The company's SCB is 2.50% through September 2027, and the G-SIB surcharge remains at 1.50%. The Basel III endgame proposal released in March 2026 could change RWA calculations, which is a key item to watch.
What were the notable one-time or non-recurring items in the quarter?
Several items affected comparability: a $263M gain in first quarter 2025 on the sale of a commercial mortgage servicing business is absent this year; the sale of the rail car leasing business in January 2026 reduced lease income and expense; equity securities gains improved to $172M (from a $343M loss) on venture capital results; and the effective tax rate rose to 11.6% from 9.6% due to fewer discrete tax benefits. On the legal side, a $84M settlement of the 401(k) plan litigation was approved in April 2026, after the quarter ended.
06—Continue